Sales Strategy

As an App company, the two most important markets are the Apple and Android
stores, where the android market is made up of a numerous amount of retailors,
such as Amazon and Google Play, both with separate licensing costs, whereas
the Apple store is solely under Apple licensing. Google Play is the main Android
app supplier, thus the biggest competitor to Apples App store.
To work out the split of our potential download sales in both markets and
therefore planning where most of our revenue will be collated from, research was
undertaken to find the sales figures per month and per annum of similar games
over both Apple and Android stores. Information that was found online included:
Comparing the cash pouring into Apples App Store versus its app marketplace
competitor Google Play isnt much of a contest. A November study from app
analytics company App Annie shows that the App Stores monthly revenues are
300 percent greater than Google Plays.
- http://www.wired.com/business/2012/12/ios-vs-android/ - Sarah Mitrof
This source initially shows that the Apple market revenue is significantly larger
than that of the main Android App store; Google play. The following graph and
quote was taken from the Guardian newspaper website:

In relative value, iOS's app revenues (including in-app sales) as recorded by

App Annie have gone from 100% in January to 113% now; for Google Play,
indexed against iOS, it has gone from 7% to 28%.
That's slow progress for iOS and huge progress for Android, but there's still a gulf
between the two that speaks of a wide variance in usage with iOS users much
more likely to buy apps, and Android users less likely to. There's probably a
much wider variance among Android users, where those with high-end devices
might pay as much as, if not more than, the average iOS user.

Compared with the index in January, iOS downloads have actually fallen from
100% to 90% while Google Play downloads have grown from 63% to 80%,
having begun to take off in July

- http://www.guardian.co.uk/technology/appsblog/2012/dec/04/ios-androidrevenues-downloads-country
This key piece of information, including a visit to the suggested App Annie [1]
website (data graphs shown below and in appendix), which is dedicated to
procuring monthly and yearly download sales records of apps downloaded on
both Google Play and Apples App store across an abundant selection of
countries, proved to us that the vigorous growth of the Androids Google Play
monthly download figures is one that cannot be overlooked by Apple, thus a split
of 60% expected sales from Apples App store and 40% expected from Google
Play was decided upon.
App Annie Index Report, Download and Revenue Graphs:

To find the expected number of download sales per annum/month, visits to sites
such as; http://xyo.net [2], which acquires the total number of sales of diferent
apps and the number of sales in the past month across both markets, was useful
in helping us to forecast the approximate number of units that is assumed will be
sold across the 3 year plan.
Potential sales prospect for Racing Wings:

Sales Forecast
With all of the information thus collated, these tables and graphs were produced
to show our predicted sales of Racing Wings and the cost of these to our
business:

Primary Costs
Year 1
40000
0.69
217
27,383

Year 2
80000
0.69
217
54,983

Year 3
60000
0.69
217
41,183

24000
16,560.
00
62
0.3
16000
11,040.
00
62
20,000
5

48000
33,120.
00
62
0.3
32000
22,080.
00
62
0
5

36000
24,840.
00
62
0.3
24000
16,560.
00
62
0
5

Net Profit

2,286.0
0

44,918.
00

33,602.
00

Investment

100,00
0

Units Sold
Price
Unit Cost
Gross Profit

Secondary Costs
Apple App Units
Apple Sales
Apple License
Apple Sales Charge (30%)
Android App Units
Android Sales
Android License
Advertising
Salary

Culmulative Net Profit (inc.

Invesment)

102,28
6.00

147,20
4.00

180,80
6.00

Units Sold This projection is assumed using the research data obtained from
similar games on the website: www.xyo.net
Units Sold The decrease from Year 2 to Year 3 shows the normal decline in
interest in old games, this efect can be counteracted by a second version of
the game or by discounts in cost.
Price: 0.69 This was the chosen cost per download; this is primarily for the
large American market where this converts into approximately $1.
Unit Cost: 217 This equals the $349 cost of the yearly usage of the Corona
SDK Platform.
Apple License: 217 This equals the yearly cost of $99 for Apple App
licensing.
Android License Due to the numerous distributors of Android Apps, there
are varying costs of licensing which range from $0-$99, thus the largest
amount has been taken and converted into GBP to show the least amount of
possible profit.
Net Profit The small amount of assumed profit procured in Year 1: 2,286, is
due to the large advertising costs used only for the first year.

Breakdown of Unit Sales: Year 1

10000
8000
6000
No. of Units Sold

4000
2000
0

Month

F
This graph shows the breakdown of assumed download sales for the first year of
distribution. As you can see, the first couple months have very little sales, this is
due to the lack of awareness of the general public, to combat this we will place
adverts on both the tubes and the Royal Aeronautical Societys careers website.
Sales then gradually increase in proportion to interest to a total of 40,000
downloads for the year, producing an average of 3,334 downloads per month.

Model Aircraft Sales Forecast

Primary Costs
Units
Unit Cost
Base Cost
Gross Margin

Year 1
500
60
25
17,50
0

Year 2
1000
60
25
35,000

Year 3
650
60
25
22,75
0

7,000
.0
42

14,000
.0
83

9,100
.0
54

107

208

137

5,720
.80

11,500
.40

7,456
.00

Secondary Costs
Profit Split (40%)
Units Sold per Month
(approx.)
Postage Total per Month (UKUS)
Net Profit

At the end of each month, we collate the orders and send the delivery
destinations and totalled split profits to Tiger Hobbies UK, who in turn will
ship them on our behalf.
Postage Total per Month (UK-US) The figures for shipping to the US are
used as they typically provide the biggest market in the app world, thus
most orders will come from there.
Postage costs have been taken from the our businesses 40% cut, not from
the gross profit (which includes Tiger Hobbies UK share)
Shipping price approximations have been sourced from the Business
Section of the Royal Mail Website:
http://www.royalmailtechnical.com/calculator/calculator.cfm - Prices may
vary.
To reduce costs, resourcing a supplier of the Hobby Master products within
the US would cut postage costs dramatically.

Appendix:
[1] App Annie Index Report:

http://s3.amazonaws.com/files.appannie.com/blog/pdf/App+Annie+Index+No
v+2012+Report.pdf

App Annie CSR Racing (Drag Race game, similar in context to that of Racing
Wings) download trends:

[2] www.xyo.net